Omnichannel boosts local retail sector
Omnichannel boosts local retail sector
The omnichannel retail model, which integrates all existing shopping platforms, has helped the retail sector outperform many others to become the one with the fastest recovery rate post-pandemic.
In early October, a survey by Deloitte Vietnam pointed out several transformative trends in the country’s retail sector and opportunities for retailers to innovate and develop omnichannel strategies. One trend that stood out was the accelerated normalisation of omnichannel retail after the pandemic.
“Most Vietnamese today consumers in urban areas are used to omnichannel purchasing, making purchases via brick-and-mortar stores, brand websites, and third-party instant messaging platforms and food delivery apps – toggling between them to find the right delivery slot or promotional deals,” the report said.
Vu Duc Nguyen, leader at Vietnam Consumer Industry at Deloitte said, “In the year ahead, Vietnam’s retail sector is expected to experience a rapid rebound. We believe that at least some of the new omnichannel habits will become permanent as consumers grow accustomed to the convenience they offer.”
The omnichannel march is relentless, and Vietnam Report’s retail business survey from last month showed that of the Top 10 Reputable Retail Companies in 2022 for Fast Moving Consumer Goods and Supermarkets, half are large companies implementing the integrated model.
Saigon Co.op Mart, a chain of domestic supermarkets and retail stores, surpassed other major foreign retail brands such as AEON and Lotte to take third place.
Nguyen Ngoc Thang, director of Saigon Co.opmart’s operation division, said the sector has returned to positive growth in the first nine months of this year.
“Total retail sales of consumer goods and services by the end of September in Ho Chi Minh City, the key market of Saigon Co.opmart, reached about $35 billion, up nearly 26 per cent over the same period in 2021,” Thang said.
Retail is the sector with the most impressive recovery rate among economic sectors, and its development prospects will be even brighter in the last months of the year, according to the General Statistics Office.
In the first nine months of 2022, total retail sales of consumer goods and services are estimated at $181 billion, up 21 per cent over the same period last year, despite inflation, which has led to higher prices.
Vietnam Report’s retail business survey shows that nearly 54 per cent of retail businesses have achieved business performance equal to and exceeding pre-pandemic levels, with large-scale enterprises with a methodical business strategy having a faster recovery and growth rate than the rest. A total of 46.2 per cent of businesses agrees that developing new omnichannel retail models will be one of their five key strategies going forward.
For the past three years, along with opening more hypermarkets, Saigon Co.op has focused on developing different retail models and launching a chain of safe and convenient food stores, which also apply e-label technology to adjust selling prices automatically. The pandemic meant the brand only opened 40 new points of sale in 2021, but this plan will continue this year with the goal of opening three to five more supermarkets, hypermarkets, shopping centres, and 80-100 to small retail stores.
The omnichannel model is not new and is actively being developed by many large retailers such as WinCommerce, the operator of WinMart supermarkets and WinMart+ convenience stores, and the system of supermarkets and retail stores under AEON Vietnam. WinCommerce is the largest modern retailer in Vietnam, with nearly 3,000 WinMart/WinMart+ supermarkets and stores in 60 localities, a third of which are supermarkets and convenience stores in Hanoi.
WinMart+ convenience stores follow the all-in-one model. Consumers can shop for necessities, enjoy drinks, and use cheap telecommunications services. Integrating services and utilities has helped WinMart+ attract customers from many segments.
Nguyen Trong Tuan, director of WinMart’s supermarket division said, “In 2022, WinMart/WinMart+ will enter an acceleration phase and aim to increase its size 10-fold by 2025.”
Central Retail, a retail leader in Thailand with 12 years of investment and expansion in Vietnam, currently owns more than 300 stores and 39 trade centres, including GO!, Tops Market, Big C, Lan Chi Mart, Nguyen Kim, Supersports, and LookKool.
Following the success of the omnichannel retail model achieved in the Thai market, Central Retail has effectively built an omnichannel sales platform for the food business, bringing in more than 8 per cent of Central Retail’s total sales in Vietnam.
According to Central Retail Vietnam CEO Olivier Langlet, the company plans to invest more than $869 million in the next five years, with four key goals: becoming the top omnichannel platform in food and property in Vietnam; driving sales to $2.8 billion; doubling omnichannel sales penetration; and expanding its presence to 55 of 63 provinces.
AEON Vietnam, a large retailer from Japan, seems to be slower than other competitors in implementing the omnichannel model. However, in the past two years, the group has made great strides in increasing the number of supermarkets and stores.
Currently, AEON Vietnam is developing five retail business areas with seven shopping malls, department stores and supermarkets, 12 small and medium supermarkets, more than 20 speciality stores, an AEON e-commerce site, and two distribution centres.
“The first 10 years were the development phase of AEON in the Vietnamese market. We will continuously test, launch, and evaluate new retail models to meet customers’ needs and create momentum for future growth,” said Furusawa Yasuyuki, general director of AEON Vietnam.
